SEEZEE Ceramics Ltd

Abstract:     
The SEEZEE Ceramics Ltd (SEZ) case, set in India, provides a framework for financial analysis and for exploring a link between economic profits and shareholder value. The student is required to consider a critical decision for SEZ; the decision to invest and grow as opposed to focusing on consolidation of the existing business operations. Associated with this key decision are related issues pertaining to the financial position of SEZ. The accounting statements point to growing earnings for the company; however when seen in the perspective of returns expected by the market, the picture is not bright for SEZ - this is brought out by looking at the economic profits of SEZ. From being a preferred stock of analysts, SEZ moved quite quickly to large drops in market value. The case offers students an opportunity to undertake an analysis of SEZ's capital structure and the company's cash flow statements in order to address the principal decision, which has a direct bearing on shareholder value. In addition, views from the equity capital market also enter the frame of understanding in the course of discussion related to the company's financing mix.

Keywords: Value creation, Cash flow analysis, Capital structure, Equity financing, Finance and strategy, Ceramic tile industry

JEL Classification: N25, M41, M10, G24, G29, G31, G32

Accepted Paper Series